Electricity once again..
I don’t know what the current state of electricity prices for industrial production is on the market, but I do know that ČEZ Prodej billed me 8.92 CZK/kWh (0,3568 €/kWh) for 2024. In 2020, it was only 5.37 CZK. That’s an increase of 66% in 4 years. I tried to look at it in the context of the EU. You would almost not believe your own eyes. The price for Czech households is almost double the EU average. However, in terms of production, we are still a net exporter of energy. Roughly 40% of the electricity produced comes from nuclear power. That is, with costs below 1 CZK/KWh, i.e. 0.04 €/kWh. And how are we doing with taxation? See the following graph. The total price for the Czech Republic comes to about 360 €/MWh for households. After conversion, it is about 9 CZK/kWh (0,36 €/kWh). A terrible number…
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics
https://x.com/lukaskovanda/status/1911651920810221779?s=48
In 2024, we exported more than 9.1 TWh of electricity. I originally thought that most of it would go to Germany, but the graph shows that it is to Austria. The exchange with Germany is with a slight surplus of our exports, but it is balanced within the framework of daily consumption. At night and in the morning, electricity flows towards Germany, during the day, especially in the afternoon, when the sun is shining and the wind is blowing, the opposite. Surprisingly, we have the worst balance with Poland, where imports from Poland significantly exceed exports. What impact does this have on our energy mix and CO2?
https://eru.gov.cz/sites/default/files/obsah/prilohy/eruelectricity2023.pdf
The data vary, but for the Czech Republic the energy mix for 2024 was 340 gCO2/kWh, in Germany only 152 gCO2/kWh, in Poland 652 gCO2/kWh, Austria 69 gCO2/kWh, Slovakia 93 gCO2/kWh. So it looks like we are importing emissions from our famous polish power plant Turow, imports from Austria, Slovakia or Germany are transforming our energy into greener energy.
The stock exchange price of electricity also includes payments for emission allowances. Their value is currently €72/ton of CO2. This means that with an energy mix of 340 gCO2/kWh, the surcharge for allowances is 0.61 CZK/kWh (0,0244 €/kWh). If last year the average exchange price was €91.28/MWh, which is equivalent to 2.282 CZK/kWh, then this price already includes emission allowances and the net energy price will be only 1.672 CZK/kWh (0,06688 €/kWh). If this were the final price, then that would be great.
But once other items are added, the price for industry looks completely different – see table.
Minimum 6.2299 CZK/kWh (0,25196 €/kWh). If we buy green energy from Norway, with zero emissions, then the price could look like the next table. We will save 0.61 CZK/kWh, but we will still be above 5,6199 CZK/kWh (0,2247/kWh) without VAT. This is surprising, I thought that there would be more motivation to consume green energy. The result of greener energy is not a bonus in the financial situation of our business, but only in lower emissions on the ESG report, i.e. a piece of paper.
But it will not improve our air. CO2 is a gas, and so it flows through the atmosphere like the winds blow. With our green policy, with our money, we dilute the atmosphere in China, India, and vice versa, no matter how hard we try, we will breathe what comes from elsewhere. Why do we do this? Well, I don’t have an answer to that.
In any case, in the past, when I was still buying energy and gas for Bodycote, the prices were completely different.
For example. invoice from 2012, power electricity for 1.031 CZK/KWh, total price for everything 1.86 CZK/kWh (0,0744 €/kWh). Today, that’s 3.4 times more, and it’s not over yet. After all, distribution alone for 2025 will no longer be 3,078 CZK/MWh but 3,391 CZK/MWh. The state is a bit greedy.
So if the guiding idea of the state is its gradual liquidation, great, this will definitely work.
If I project this onto heat treatment furnaces, in many European countries we are already below the natural gas limit with CO2, and therefore gas-fired furnaces are already out of the question. We will have it within two/three years. But what next? Is it about the Green Deal or the liquidation of the industry as such? Or is the EU preparing, in addition to new legislative laws, a change in the laws of physics? For example, the first law of thermodynamics: A perpetual motion machine of the first kind is a periodically operating machine that would do more work than the energy received during one cycle, or the second law of thermodynamics: Heat spontaneously transfers from a hotter body to a colder body and never vice versa. Smiling? Is anyone in the EU going to change this equation?
Q = m * c * dT
For example, in 1969 we were in 11th place worldwide in steel production. In 2023 we disappeared from these tables for good. The USA was replaced in first place by China, followed by India. Exactly the two countries where emissions do not take precedence over reason. And their energy price? China 0.075 USD/kWh, i.e. 1.65 CZK/kWh, India the same.
Well, I don’t know if the times are favorable for business. And if anyone thinks that military production will save our industry, they are terribly mistaken. Weapons are simply a piece production, mostly for single use. All this talk about the multiplier effect is just empty thoughts, without any basis.
Jiří Stanislav
April 15, 2025
